CH21 (11.)

Comparative balance sheets for 2018 and 2017 and a statement of income for 2018 are given below for Metagrobolize Industries. Additional information from the accounting records of Metagrobolize also is provided.

METAGROBOLIZE INDUSTRIES Comparative Balance Sheets December 31, 2018 and 2017 ($ in 000s)
		2018			2017
Assets
Cash	$	540			$	285
Accounts receivable		670				350
Inventory		820				430
Land		600				570
Building		900				900
Less: Accumulated depreciation		(250	)			(220)
Equipment		3,300				3,110
Less: Accumulated depreciation		(481	)			(440	)
Patent		1,600				1,800
	$	7,699			$	6,785
Liabilities
Accounts payable	$	920			$	720
Accrued expenses payable		310				250
Lease liabilityland		130				0
Shareholders' Equity
Common stock		3,640				3,500
Paid-in capitalexcess of par		550				460
Retained earnings		2,149				1,855
	$	7,699			$	6,785

METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2018 ($ in 000s)
Revenues
Sales revenue	$	3,152
Gain on sale of land		70		$	3,222
Expenses
Cost of goods sold	$	1,120
Depreciation expensebuilding		30
Depreciation expenseequipment		608
Loss on sale of equipment		25
Amortization of patent		200
Operating expenses		350			2,333
Net income				$	889

Additional information from the accounting records:

1. Annual payments of $20,000 on the finance lease liability are paid each January 1, beginning in 2018.
2. During 2018, equipment with a cost of $630,000 (90% depreciated) was sold.
3. The statement of shareholders' equity reveals reductions of $230,000 and $365,000 for stock dividends and cash dividends, respectively.

Required: Prepare the statement of cash flows of Metagrobolize for the year ended December 31, 2018. Present cash flows from operating activities by the direct method.

X Answer is complete but not entirely correct. METAGROBOLIZE INDUSTRIES Statement of Cash Flows For year ended December 31, 2018 ($ in 000s) Cash flows from operating activities: Cash inflows: From customers $ 2,832 Cash outflows: To suppliers of goods For operating expenses (1.310) (290) Net cash flows from operating activities Cash flows from investing activities: Purchase of equipment Sale of land Sale of equipment (730) X 100 X 30 Net cash flows from investing activities Cash flows from financing activities: Payment of cash dividends Payment on lease liability O 0000 0000 0000 00 (365) 201 Net cash flows from financing activities Net increase in cash Cash balance, January 1 Cash balance, December 31 Noncash investing and financing activities: Acquired land (385) 255 285 540 $ S 130